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• Facebook raises $200 million D round: In May 2009, Facebook announced a new financing round – raising $200
million from Digital Sky Technologies. The transaction gave Digital Sky a 1.96% stake, valuing Facebook at $10
billion. This financing brought the company’s total to $678.2 million. This was also the largest financing we
recorded in 2009.
• Twitter raises $100 million E round: The third largest financing round in 2009 belonged to Twitter – a $100
million Series E in September 2009. The financing reportedly valued Twitter at $1 billion – a remarkable valuation
for a company that has not yet formalized a revenue model! More recently, it has been reported that Twitter was
actually profitable in 2009 due to the $25 million in search deals it signed in October with Google and Microsoft.
• Skype is acquired for $2.025 billion: By far the largest overall transaction in our database in 2009 was the
acquisition of a majority position (65%) in Skype from eBay for $2.025 billion – announced in September 2009. The
transaction was completed in November 2009. eBay had purchased Skype for $4.0 billion in 2005.
• Social Gaming financing activity reaches ~$1 billion (Zynga, Playfish, Playdom, etc.): Perhaps the hottest
sector overall in 2009 was Social Gaming. This segment of the W eb 2.0 market had the third highest number of
deals (39) and generated almost $1 billion in financing/M&A activity – the second highest total overall (Figure 1).
Three transactions in particular stand out in the social gaming space – the $400 million acquisition of Playfish (by
Electronic Arts, November 2009), the $180 million financing of Zynga (Series C, December 2009, by Digital Sky),
and the $43 million first round of financing for Playdom (New Enterprise lead, November 2009, Series A). There
has been much speculation as to how the larger social gaming companies will proceed, with potential IPO or further
strategic M&A most likely.
F inancing/M&A (2009)
B y S ector/Type
2, 500
2, 000
S eries E
S eries D
1, 500 S eries C
(US $ mm)
S eries B
S eries A
P IP E
Debt financing
1, 000
Angel/S eed
Acquis ition
500
0
C rowds ourced C ontent
Mobile P a yment
Microblog
Mobile A d
T ravel
Advertis ing
Online Dating
B log
Online L earning
C las s ified
P ublis hing
C ollaboration
S earch
Aggregation
V ideo
Internet R etail
W idget
G aming
Online C alendar
S MS /V oice
Mobile
C omment/R eputation
Advertis ing/Mobile
V irtual W orld
Mus ic
Infras tructure
E nterpris e
W iki
Media
S ocial C ommerce
V is ual C ommerce
Micromedia
S ocial Networks
Analytics
V irtual G oods
F inancial S ervices
V ertical C ommunities
Documents
RSS
Location-bas ed S NS
S AS
• Hottest new sector? Location-based social networks (Foursquare, Gow alla, etc.). Unique visitor value
skyrockets: Financing activity for location-based social networks really heated up late in 2009. W hile the total
financing raised in 2009 was quite small (~$15 million), the hype surrounding location-based SNS companies was
substantial. In our opinion, this was highlighted by the $8.4 million December Series B financing for Gowalla. The
reported valuation of $28.4 million implies a value of $568 for each of its 50,000 users (Figure 2). That compares to
a $40 per user value we estimate for the Foursquare financing in September.
$500
$400
($)
$300
$200
$200
$113
$100 $88
Y elp
MMC (P oynt)
F riendF eed
F riends R eunited
C lub P enguin
P laxo
Mint.com
B ebo
T witter
T witter
Linkedin
S tumbleU pon
F ours quare
P ageO nce
Zynga
G owa lla
P eople Media
F acebook
Dec-09 May-08 S ep-09 O ct-08 A ug-09 S ep-09 S ep-09 May-09 Aug-07 F eb-09 F eb-08 Mar-08 J ul-09 Dec-09 Dec-09 Dec-09 N ov-09 Dec-09 May-09 Aug-09
500.0 16.0
14.2
450.0
14.0
13.2
400.0
12.0
350.0 10.8
10.0
300.0 9.0
(US$m)
(US$m)
250.0 7.4 8.0
7.0 6.9
6.4 6.5
6.2
200.0 5.9
5.6 6.0
4.7
150.0
4.0
100.0
2.0
50.0
0.0 0.0
Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09
September was biggest month: September was the biggest month for capital market activity, driven by the acquisition of
Skype for $2.025 billion (Figure 4). After a slow October, financing/M&A activity picked up in the last two months of the
year, with December being the largest month for financing (excluding M&A).
3, 000
2, 500
2, 000 S eries E
S eries D
S eries C
S eries B
1, 500 S eries A
P IP E
Debt fina ncing
Angel/S eed
1, 000 Acquis ition
500
-
Dec-08 J an-09 F eb-09 Ma r-09 Apr-09 Ma y-09 J un-09 J ul-09 Aug-09 S ep-09 O ct-09 Nov-09 Dec-09
$10 billion cumulative: W ith $2.8 billion in financing in 2009, total financing for our W eb 2.0 universe is now $9.7 billion
(Figure 5). The $2.8 billion raised in 2009 was down 17.2% from the $3.4 billion raised in 2008.
1, 431. 6
1,400.0
10, 000.0
1,200.0
1, 067.3
8,000. 0
1,000.0 950.4
830.0
(US $m)
(US $m)
800. 0 6,000. 0
713.7
658. 0 662. 0
623.0
600. 0
492. 4 4,000. 0
426. 3
400. 0 338. 7
- -
Q 1 Q2 Q 3 Q 4 Q 1 Q 2 Q 3 Q4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q3 Q 4 Q1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4
2004 2005 2006 2007 2008 2009
Smaller deal sizes: Deal size averages fell below long-term historical levels in 2009, with Series A-D rounds all below
long-term average levels (Figure 6). However, angel rounds were significantly larger than historical levels, averaging $3.0
million in 2009, above the $2.6 million long-term average.
30.0
28.4 28.5 28.5
25.0 24.2
22.4
20.0
(US$m)
14.9
15.0
12.9
10.2
10.0
7.6
6.5 6.3 6.2
5.0 4.4
3.0 2.9
2.6
0.0
Angel/Seed Debt financing PIPE Series A Series B Series C Series D Series E
Early rounds dominate: As Figures 7 and 8 show, early rounds (Angel/Series A) dominate our financing landscape, in
terms of number of deals with almost 50% of deals. Series C rounds raised the most overall (25.8% of dollars raised), just
ahead of Series B (25.2%).
Debt financing
S eries E 0. 9%
1. 4%
P IP E
1. 4%
S eries B
26. 2%
S eries A
15. 8%
Angel/S eed
18. 6%
S eries C
25. 6%
Q4 largest for financing: Figures 9 and 10 show the financing activity by month and quarter for 2009, broken out by early-
stage (Angel/Series A), mid-stage (Series B&C), and late-stage (Series D, E, and PIPEs). Q4 was the largest quarter in
terms of amount raised, but the second lowest quarter for number of deals.
900.0
828.0
800.0
131.0
700.0
653.2 657.3 660.0
600.0 94.2
222.3 227.3
100
91
90
86
9
5 81
80
6
70 67
7 35
60 42
37
Late Stage (D/E)
Mid-Stage (B/C)
(#)
50
Early Stage (Angel/A)
Total
40
40 39 1 37
3 34
30 3
28 17 29
30 2
13 1
2 24 24
21 22
2 46 4 12 16
20 18 2 15 40 18
3 38
2 8 2
19
10
11 14
9 21 22 21 9
10
14 16 15
13
10
7 7 7 6 7
-
Jan-09 Feb-09 Mar-09 Q1/09 Apr-09 May-09 Jun-09 Q2/09 Jul-09 Aug-09 Sep-09 Q3/09 Oct-09 Nov-09 Dec-09 Q4/09
Figure 10. Capital Market Activity, by Type, Last Twelve Months, # of Deals
Source. Company reports
Page 8
U.S. dominates financing landscape: Figures 11 and 12 show the financing/M&A activity by country (based on company
HQ). The U.S. had the most deals – over 75% of the total (by number of deals).
Canada UK
2.0% 4.1%
Luxembourg
31.2%
France China
1.3%
3.6%
ROW
2.4% Israel
2.9%
USA ROW
76.2% 8.5%
USA
46.7%
Figures 11 & 12. Capital Market Activity, by Geography, Last Twelve Months
Source. Company reports
TOP 10 LISTS
Top 10 funded companies: Facebook tops the financing list for 2009, having raised $200 million (Figure 13). Zynga, with
its $180 million round late in the year, came in second ($195 million total), followed by Twitter which raised $135.7 million.
No other company raised more than $100 million in 2009.
250.0
200.0
150.0
Series E
(US$ mm)
Series D
Series C
Series B
Series A
100.0
50.0
0.0
Facebook Zynga Twitter RockYou Turbine Playdom Youku Zoosk Pandora ChaCha
Media
Top 10 acquirers: As lead investor in the Skype acquisition, Silver Lake leads our Top 10 acquirers list for 2009 (Figure
14). Second was Electronic Arts with the $400 million (including earn-outs) acquisition of Playfish. One of the last deals
announced in 2009 drove O2 to the #3 spot with its $207 million acquisition of JaJah.
2500
2000
1500
(US $ mm)
1000
500
0
Intuit
K ongZhong
Ma tch. com
O2
Adknowledge
Hi-Media S . A.
E lectronic Arts
IT V
E ntertainment L td.
Network
Top 10 lead investors (# deals): Accel Partners was the most active lead investor in 2009, leading nine transactions
(Figure 15). Benchmark Capital was second with seven lead investments, followed by Charles River Ventures with six.
Four firms were lead on five transactions.
10
0
Accel B enchmark C harles R iver New Dra per F is her C ana an Augus t S equoia F irs t R ound B es s emer
P artners C apital V entures E nterpris e J urvets on P a rtners C a pital C a pital C apital V enture
As s ociates P artners
Top 10 lead investors (amount invested): W hen analyzing amount invested, Digital Sky Technologies was the largest
lead investor in 2009, participating in $380 million of transactions (Figure 16). Insight Venture Partners was second ($100
million), followed closely by Benchmark Capital with $99.4 million.
400
350
300
250
(US $ mm)
200
380. 0
150
100
Morgentha ler
New E nterpris e
Ins ight V enture
S oftba nk
G reylock P artners
T echnologies
Accel P artners
C a naa n P artners
Digita l S ky
V entures
As s ociates
V entures
P a rtners
Top 10 acquisitions: The largest acquisition in 2009 was the $2.025 billion acquisition of Skype (Figure 17). In second
place was the $400 million Playfish acquisition, followed by the $207 million JaJah acquisition.
2500
2000
1500
(US$ mm)
1000 2025
500
400
207 170
80 80 50 44 42 41
0
Skype PlayFish Jajah Mint Shanghai People Media Super Rewards Ku6 Friends AdLink Internet
Dacheng Reunited Media
Network
C A P I T A L M A R K E T S A C T I V I T Y (P R I C E P E R F O R M A N C E )
Web 2.0 index outpaces NASDAQ in 2009: Our W eb 2.0 index (market-cap weighted) essentially mirrored the
performance of the NASDAQ composite index for the first three months of 2009. Since then, the index has diverged in a
much stronger recovery relative to the NASDAQ index (Figure 18).
200
150
100
50
0
1/5/09
1/19/09
2/2/09
2/16/09
3/2/09
3/16/09
3/30/09
4/13/09
4/27/09
5/11/09
5/25/09
6/8/09
6/22/09
7/6/09
7/20/09
8/3/09
8/17/09
8/31/09
9/14/09
9/28/09
10/12/09
10/26/09
11/9/09
11/23/09
12/7/09
12/21/09
Index: Web 2.0 (Market Cap) ^COMP - Share Pricing
Strong 2009 performance: Fifty-three companies in our universe had positive stock price performances in 2009 (Figure
19), while 27 companies showed negative or flat returns. The performance for the group was led by Fluid Music Canada,
Inc. with a 400% return in 2009, followed by Chinese Gamer International with a 353% return. Twenty-five of the
companies saw their stock prices at least double in 2009. The worst performance was by Beyond Commerce, Inc. dropping
98.4% in 2009. BroadW ebAsia Inc. also fell more than 90% (-90.9%).
Source. Capital IQ
10, 000
20, 000
30, 000
40, 000
50, 000
60, 000
70, 000
80, 000
90, 000
VALUATION
J an-05
F eb-05
Mar-05
Apr-05
May-05
J un-05
J ul-05
Oct-07
Nov-07
Dec-07
J an-08
F eb-08
Mar-08
Apr-08
May-08
J un-08
J ul-08
Aug-08
S ep-08
Oct-08
Nov-08
Dec-08
J an-09
F eb-09
80 public companies we track hit an all-time high at the end of 2009, reaching $77.4 billion (Figure 20).
Mar-09
Apr-09
May-09
J un-09
J ul-09
Aug-09
S ep-09
Oct-09
Nov-09
Dec-09
Page 13
2009 ends at record high: After bottoming in November 2008 at $28.8 billion, the combined market capitalization of the
Page 14
Tencent the gorilla: Tencent Holdings (SEHK:700), with a market cap of approximately US$39.5 billion, has driven a
large portion of the gains over the last year (Figure 21), rising from a market cap of $9.8 billion in November 2008. The
other big contributors have been CYOU (+$1.8 billion), TSE:3632 (+$2.8 billion), MTG.B (+$2.1 billion), NTES (+$2.5
billion), and SNDA (+$1.9 billion).
AC L Z A052790
Market C apitalization 3838 XT R A: A5A
BS GC B W AV
B Y OC AIM: B G T
90, 000 BWBA C HIN.A
C Y OU G T S M: 3083
CWR L T S X: C X
C M: DA DXN
80, 000 DG L P DG T W
DP DM A041060
E XT I T S X: F MN
70, 000 FRG 6180
3812 G E O 1V
GA G IG M
GR VY T S E : 3632
60, 000 3765 A047080
IAC I IE E
AS X: J MB 3888
50, 000 T S XV :LM L OO K
MAG Y 2121
(U S $m)
MT G B MK B
T S X V : MMC MY R N
40, 000 A095660 777
NT E S T S X: NL N
NXP C 2497
30, 000 590057 OT E X
OP W V PWR D
T S XV :P N QP S A
R BCI S NDA
20, 000 S FLY A066270
S TVI S C LW
S O HU L OV
10, 000 S P XA 700
NC T Y TS CM
TR E E T S XV : US S
U NT D UO MO
- V C LK V O IS
May-05
Nov-05
May-06
Nov-06
May-07
Nov-07
May-08
Nov-08
May-09
Nov-09
J an-05
Mar-05
J ul-05
S ep-05
J an-06
Mar-06
J ul-06
S ep-06
J an-07
Mar-07
J ul-07
S ep-07
J an-08
Mar-08
J ul-08
S ep-08
J an-09
Mar-09
J ul-09
S ep-09
K O S E : A069080 W ZE
W DDD O1B C
A052770 A023770
Online Gaming companies lead market-cap charts: Thirteen companies in our W eb 2.0 universe top US$1 billion in
market capitalization (Figure 22). Forty-six of the 80 companies have market caps under US$100 million, with 28 under
US$25 million. Online gaming companies dominate the top of the list, led by Tencent Holdings (SEHK:700) with a market
cap of approximately US$39.5 billion.
TEV/Revenue (LTM) averages 2.47x: The overall median TEV/Revenue (LTM) multiple for our group is 2.47x (Figure 23).
The multiple at year-end dropped slightly from 2.53x at the end of November. The average multiple troughed in October
2008 at just 1.40x and peaked at 4.49x in January 2007. Note that we exclude multiples greater than 100x.
E V / R evenue
5.0x 80
4.5x
70
4.0x
60
3.5x
50
3.0x
2.5x 40
2.0x
30
1.5x
20
1.0x
10
0.5x
0.0x 0
Ma y-05
Ma y-06
Ma y-07
Ma y-08
Ma y-09
Nov-05
Nov-06
Nov-07
Nov-08
Nov-09
J a n-05
Ma r-05
J ul-05
S ep-05
J a n-06
Ma r-06
J ul-06
S ep-06
J a n-07
Ma r-07
J ul-07
S ep-07
J a n-08
Ma r-08
J ul-08
S ep-08
J a n-09
Ma r-09
J ul-09
S ep-09
Median C ount
# Companies
As k net AG
0.0
5.0
10.0
15.0
20.0
25.0
Source. Capital IQ
Source. Capital IQ
T heS treet.com, Inc .
3
OTCPK
20.7
B eta wav e C orporation
1
HLSE AQ Intera ctive, Inc .
12.0
SEHK T ree.C om, Inc.
11.6
Figure 24. TEV/Revenue Ranking
OTCBB P erfect World C o., Ltd.
11.4
U nis erve C ommunications C orp.
3 16 2
ASX
10.7
J umbuc k E nterta inment L imited
2
GTSM N orthgate T echnologies L imited
8.2
3
TSX O penwave S y s tems Inc .
C y berplex Inc .
5
TSE
6.8 5.4
G igaMedia Ltd.
5
TSXV
C DC C orp.
3
XTRA Ac toz S oft C o. , Ltd.
S NAP Intera ctive, Inc.
1
SWX
DADA S pA
2
AMEX
0.0 0.1 0.1 0.1 0.3 0.3 0.4 0.4 0.4 0.4 0.5 0.5 0.6 0.6 0.6 0.7 0.8 0.8 0.8
1
OSE United O nline Inc .
OM B ey ond C ommerc e, Inc.
H anbitS oft, Inc .
NasdaqGS
Y nk K orea Inc .
1 14 1
CM S pa rk N etwork s , Inc .
1
KLSE
1
BSE
G a mania Digital E ntertainment C o., Ltd.
4
NasdaqGM
0.4 0.2
0.9 1.0 1.0 1.2 1.2 1.3 1.3 1.6 1.6
S hutterfly , Inc .
1
RTS
0.0
Y D O nline C orp.
C ornerWorld C orporation
Modern T imes G roup Mtg AB
P N I Digital Media Inc.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
T E V/L T M R evenue (x)
# Companies
S K C ommunica tions C o., Ltd.
1
Finland
O pen T ex t C orp.
12.0
XIN G AG
2
Australia
10.7
My riad G roup AG
United
S ohu.com Inc .
29
7.7
States
2.8 2.9 2.9 3.2 3.3 3.4
10
7.4
Wiz z ard S oftware C orporation
3.8
3
Taiwan
5.7
is eemedia Inc .
6
4.8
Japan UO MO Media, Inc
Acceleriz e New Media , Inc .
5.1 5.1 5.2 5.7
9
Canada
C ha ngy ou.com L imited
South K ings oft C o. Ltd.
9
3.3 3.3
Korea F rogs ter Intera ctiv e P ic tures AG
6.0 6.0 6.7
3
Germany Lingo Media C orporation
3.2
Mix i, Inc .
8.1 8.1
1
Switzerland
3.2
G eoS entric O y j
12.0
G ree, Inc .
1
Sweden
2.0
E olith C o. Ltd.
13.113.2
1
Italy C hines e G amer Interna tional
0.8
14.9
1
Malaysia
0.6
NeX plore C orporation
MO K O .mobi L imited
20.721.0
1
Hong Kong
Corp. (40.4x), and Dolphin Digital Media, Inc. (42.1x) (Figure 24). Twenty-one companies have multiples under 1.0x.
1
India B igs tring C orp.
40.4
0.6 0.4
Dolphin Digital Media, Inc.
42.1
1
Page 17
Russia
0.0
TEV/Revenue (LTM) by country/exchange: W e have also calculated multiples based on where the companies are listed
or domiciled. Figure 25 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest
TEV/Revenue (LTM) by company: Three companies trade above 25x revenue – Tencent Holdings Ltd. (27.4x), Bigstring
number of companies (16), trading at an average multiple of 11.4x. On a geographic basis, the United States has the most
Page 18
TEV/EBITDA (LTM) averages 11.6x: The median multiple for the 41 companies with positive EBITDA (and multiples under
100x) is 10.75x LTM EBITDA (Figure 27). The median multiple has risen slightly from 10.50x at the end of November but
is still well below the peak of 23.7x in April 2006. The median is up significantly from the recent trough levels around 5.5x.
E V / E B ITDA
25. 0x 45
40
20. 0x
35
30
15. 0x
25
20
10. 0x
15
10
5.0x
0.0x 0
Ma y-05
Ma y-06
Ma y-07
Ma y-08
Ma y-09
Nov-05
Nov-06
Nov-07
Nov-08
Nov-09
J a n-05
Ma r-05
J ul-05
S ep-05
J a n-06
Ma r-06
J ul-06
S ep-06
J a n-07
Ma r-07
J ul-07
S ep-07
J a n-08
Ma r-08
J ul-08
S ep-08
J a n-09
Ma r-09
J ul-09
S ep-09
Median C ount
TEV/EBITDA (LTM) by company: Uniserve Communications Corp. (40.2x) and SK Communications Co., Ltd. (43.7x) have
the highest multiples in the group (Figure 28). Fourteen companies have EBITDA multiples under 7x.
T E V/L T M E B IT DA (x)
50. 0
43. 7
45. 0
40. 2
40. 0
35. 0
30. 0 27. 7
25. 7
24. 5
25. 0 22.6
21. 0
20. 0
14. 9
13. 8 14. 2
15. 0 12. 7 12. 8 13. 0 13. 2
10.5 10.8 11. 0 11. 2
9. 4 9. 7 10. 3
10. 0 7. 6 7. 8 8. 0
5. 8 6. 0
4. 4 4.5 4.8 5. 0 5. 4
5. 0 3. 4 4. 1 4. 2
0. 2 0. 3 0. 7 1. 0
0. 0
C DC C orp.
O pen T ex t C orp.
NetDragon WebS oft, Inc .
C yberplex Inc .
S ohu. c om Inc .
Y D O nline C orp.
G ree, Inc .
Mix i, Inc .
E olith C o. L td.
XING AG
P erfec t World C o. , L td.
Y nk K orea Inc.
Webz en Inc.
S hutterfly , Inc.
TEV/EBITDA (LTM) by country/exchange: Figure 29 shows the average TEV/EBITDA multiples by stock exchange. The
OTCBB has the largest number of companies (14), trading at an average multiple of 4.8x. On a geographic basis, the U.S.
has the most companies (29), trading at an average of 8.1x EBITDA (Figure 30).
15.0
(x)
NasdaqGM
KOSE
TSE
OSE
SEHK
NasdaqGS
RTS
OM
CM
XTRA
AMEX
TSX
TSXV
ASX
0.0 0.3
Germany
Canada
Japan
Hong
United
China
Russia
Italy
South
Korea
Kong
States
Taiwan
Australia
Sweden
# Companies 5 8 2 1 5 3 1 3 14 4 1 2 16 3 2 1
# Companies 9 3 9 1 6 3 1 29 10 1 2 1
P/E (LTM) averages 21.0x: The median multiple for the 32 companies with positive earnings (and multiples under 100x) is
17.7x LTM EPS (Figure 31). This is up from 16.0x at the end of November and well above the 8.8x trough multiple in
November 2008. The peak multiple was 37.4x in April 2006.
P /E
40. 0x 40
35. 0x 35
30. 0x 30
25. 0x 25
20. 0x 20
15. 0x 15
10. 0x 10
5.0x 5
0.0x 0
Ma y-05
Ma y-06
Ma y-07
Ma y-08
Ma y-09
Nov-05
Nov-06
Nov-07
Nov-08
Nov-09
J a n-05
Ma r-05
J ul-05
S ep-05
J a n-06
Ma r-06
J ul-06
S ep-06
J a n-07
Ma r-07
J ul-07
S ep-07
J a n-08
Ma r-08
J ul-08
S ep-08
J a n-09
Ma r-09
J ul-09
S ep-09
Median C ount
P/E (LTM) by company: Five companies have multiples greater than 50x – GungHo Online Entertainment, Inc. (60.6x),
W ebzen Inc. (61.4x), Mixi, Inc. (63.1x), Tencent Holdings Ltd. (68.6x), and HanbitSoft, Inc. (70.0x) (Figure 32). Four
companies have P/E multiples under 10x.
P /E L T M (x)
80.0
68.6 70.0
70.0
63.1
60.6 61.4
60.0
48.5 49.9
50.0
40.0 37.3
33.7
31.4
30.0 27.3
22.8
19.9 20.5
17.9 18.1
20.0
13.4 13.5
11.6 12.4
9.8
6.5 7.1 8.0
10.0 5.3
2.0 2.3 2.4 2.6 3.8
1.7
0.0
NE O W IZ G ames C orporation
J umbuck E ntertainment Limited
G ameO n C o Ltd.
O pen T ex t C orp.
C y berplex Inc.
G igaMedia Ltd.
Y D O nline C orp.
S ohu.com Inc.
G ree, Inc.
Mix i, Inc.
W ebz en Inc.
P/E (LTM) by country/exchange: Figure 33 shows the average P/E multiples by stock exchange. The OTCBB has the
largest number of companies (16), trading at an average multiple of 22.8x. On a geographic basis, the U.S. has the most
companies (29), trading at an average of 18.3x earnings (Figure 34).
31.4 30.5
(x)
NasdaqGM
OSE
TSE
KOSE
SEHK
NasdaqGS
OM
XTRA
AMEX
TSX
KLSE
NYSE
SWX
ASX
0.0
Germany
Japan
Canada
United
China
Malaysia
South
Korea
States
Taiwan
Australia
Sweden
# Companies 1 5 8 3 3 2 16 2 1 14 3 1 2 1 4 1
# Companies 6 9 3 9 3 29 1 10 1 2
A ccelerize New Media, Inc. US D AC LZ OTC B B 18.7 0.65 0. 0% -11.0% 0. 0% 62.5% 85.7% -18.8%
A ctoz S oft C o. , L td. KR W A052790 K OS E 128.8 17,050 -6.8% -22.0% -5.3% -33. 8% 61.6% -52.6%
A Q Interactive, Inc. JPY 3838 TSE 40.1 68,300 50.8% 68.9% 34.2% -1.7% 132.3% -17.7%
A s knet AG E UR XT R A:A 5A XT R A 21.8 3.03 -3.8% -16.1% -2.3% -3.5% -26.1% -26.5%
B igs tring C orp. US D BS GC OTC B B 1. 5 0.02 20.6% -17.2% -33.3% -29. 4% 29.7% -57.9%
B eta wave C orporation US D B W AV OTC B B 3. 7 0.13 4. 2% 56.3% 56.3% 56.3% -47.9% -47.9%
B eyond C ommerce, Inc. US D B Y OC OTC B B 1. 2 0.02 0. 0% -50.0% -85.2% -94. 9% -98.4% -98.9%
B right T hings plc GBP AIM:B G T A IM 5. 6 0.01 13.0% 6.1% 3. 8% -13. 3% 4. 0% -47.4%
B roadW ebA s ia Inc. US D BWBA OTC P K 4. 2 0.05 -44.4% -44.4% -78.3% -78. 3% -90.9% -97.5%
C DC C orp. US D C H IN.A Nas da qG S 237.5 2.24 -2.6% -8.9% -9.3% 48.3% 80.6% -42.9%
C ha ngyou.com L imited US D CY OU Nas da qG S 1,838.1 33.42 -0.2% 1.2% 2. 7% -16. 0% NM -30.9%
C hines e G a mer International TWD G T S M:3083 GTS M 1,107.4 424.00 3. 4% -1.6% -9.8% -4.3% 353.5% -18.3%
C ornerW orld C orpora tion US D CW R L OTC B B 2. 9 0.03 0. 0% -40.0% -50.0% -50. 0% -88.0% -92.7%
C yberplex Inc. C AD T S X: C X TSX 74.6 1.14 -0.9% -7.3% -12.3% -30. 9% 192.3% -42.7%
DADA S pA E UR C M: DA CM 136.8 5.91 1. 1% -5.9% -14.8% -8.0% -14.4% -27.9%
DXN Holdings B hd MY R DXN K LS E 36.4 0.55 -1.8% -1.8% -8.3% 48.6% 57.1% -20.3%
DigitalP os t Intera ctive, Inc. US D DG LP OTC B B 3. 9 0.05 -8.2% -15.1% -19.6% 28.6% 181.3% -54.5%
DigitalT own, Inc. US D DG T W OTC B B 32.8 1.20 18.8% -14.3% -40.0% -41. 5% -55.6% -65.7%
Dolphin Digital Media, Inc. US D DP DM OTC B B 11.7 0.21 -2.4% -26.8% -48.8% -57. 3% -74.4% -74.4%
E olith C o. Ltd. KR W A041060 K OS E 77.9 595.00 4. 4% 6.3% -18.5% -20. 1% 4. 4% -48.7%
E xtens ions , Inc. US D E XT I OTC P K 13.3 0.30 -33.3% 0.0% 25.0% 200. 0% 50.0% -70.3%
F luid Mus ic C anada , Inc. C AD T S X: F MN TSX 104.7 1.75 1. 2% -12.5% 25.0% 150. 0% 400.0% -18.6%
F rogs ter Intera ctive P ictures A G E UR FR G XT R A 64.1 17.50 0. 3% -1.4% -2.7% 54.9% 198.1% -18.6%
G amania Digita l E nterta inment C o. , Ltd. TWD 6180 GTS M 260.7 54.70 8. 7% 18.8% 14.3% -7.3% 150.3% -20.5%
G ameO n C o Ltd. JPY 3812 TSE 76.7 73, 500.00 11.5% 17.8% -17.5% -32. 9% -40.0% -44.7%
G eoS entric Oyj E UR G E O1V H LS E 51.3 0.04 -20.0% 0.0% -20.0% 0.0% 0. 0% -33.3%
G ia nt Interactive G roup, Inc. US D GA NY S E 1,594.3 7.04 0. 4% -1.4% 6. 8% -11. 3% 11.2% -26.4%
G igaMedia Ltd. US D G IG M Nas da qG S 178.8 3.28 3. 1% -17.6% -29.9% -41. 5% -50.5% -57.6%
G ra vity C o., L td US D GR VY Nas da qG M 46.7 2 17.5% 12.8% -5.6% 52.7% 180.0% -36.1%
G ree, Inc. JPY T S E :3632 TSE 2,763.0 5, 720.00 3. 8% 24.3% 19.2% 59.8% 112.6% -5.0%
G ungH o Online E nterta inment, Inc. JPY 3765 OS E 311.5 252, 000.00 60.0% 71.8% 9. 6% 0.0% 155.8% -10.0%
H anbitS oft, Inc. KR W A047080 K OS E 72.1 3, 830.00 -4.4% 4.4% -7.9% -18. 1% 10.4% -42.3%
IAC /InterA ctiveC orp. US D IA C I Nas da qG S 2,733.1 20.71 4. 6% 6.6% 8. 0% 28.8% 28.6% -2.7%
is eemedia Inc. C AD IE E T S XV 9. 2 0 0. 0% -5.1% 42.3% 117. 6% 184.6% -31.5%
J umbuck E nterta inment L imited AU D AS X:J MB AS X 13.5 0 3. 3% -6.1% -20.5% -20. 5% -20.5% -38.0%
K ings oft C o. Ltd. HK D 3888 S E HK 905.9 6 4. 6% 10.3% -7.1% 12.2% 130.1% -32.2%
L ingo Media C orpora tion C AD T S XV :L M T S XV 11.2 0.95 0. 0% -1.0% -5.0% -20. 8% -5. 0% -33.6%
L ookS mart, L td. US D LO O K Nas da qG M 16.8 0.98 -5.7% -8.3% -14.7% -18. 2% -40.5% -45.0%
Ma gnitude Informa tion S ys tems Inc. US D MAG Y OTC B B 8. 0 0.02 -5.3% -5.3% 100.0% 93.5% -28.0% -53.8%
Mixi, Inc. JPY 2121 TSE 1,217.0 732, 000.00 -5.5% 4.6% 25.6% 28.9% 33.8% -15.4%
Modern T imes G roup Mtg AB SEK MT G B OM 3,266.2 355.90 3. 7% 14.8% 19.4% 54.4% 103.4% -0.1%
MO K O .mobi Limited AU D MK B AS X 15.9 0.15 -9.1% 25.0% 130.8% 114. 3% 200.0% -25.0%
Multiplied Media C orporation C AD T S XV :MMC T S XV 22.4 0.18 2. 9% 5.9% 33.3% 125. 0% 227.3% -23.4%
Myriad G roup AG C HF MY R N S WX 205.8 4.85 1. 0% 0.0% 4. 8% -2.8% -24.2% -24.2%
NE O W IZ G ames C orpora tion KR W A095660 K OS E 734.8 40, 550.00 2. 4% -4.0% -4.9% 25.5% 277.2% -9.7%
NetDra gon W ebS oft, Inc. HK D 777 S E HK 275.4 4.04 2. 0% -5.8% -19.8% -29. 0% 40.3% -43.5%
Neteas e. com Inc. US D NT E S Nas da qG S 4,888.4 37.77 0. 2% -5.0% -14.0% 12.6% 82.6% -22.1%
NeuLion Incorpora ted C AD T S X: NL N TSX 74.0 0.67 1. 5% -8.2% -33.0% -8.2% 42.6% -48.5%
NeXplore C orpora tion US D NXP C OTC P K 31.2 0.56 -11.1% -24.3% -13.8% -20. 0% -44.0% -44.0%
Ngi G roup Inc. JPY 2497 TSE 32.6 24, 400.00 -6.1% 9.9% 0. 7% -32. 2% -52.2% -59.3%
Northgate T echnologies L imited INR 590057 BSE 20.2 27.05 -2.0% -16.4% -35.4% -29. 8% -59.4% -62.8%
O pen T ext C orp. US D OT E X Nas da qG S 2,289.1 40.60 1. 1% 6.0% 9. 4% 10.3% 28.8% -2.0%
O penwa ve S ys tems Inc. US D OP W V Nas da qG S 193.1 2.31 -0.3% -2.0% -7.9% 5.6% 235.1% -26.1%
P erfect W orld C o., L td. US D PWRD Nas da qG S 1,980.3 39.80 -3.1% -11.8% -11.5% 34.7% 121.6% -21.2%
P NI Digital Media Inc. C AD T S XV :P N T S XV 53.0 1.66 -2.9% 0.6% -14.0% 10.7% 9. 2% -22.1%
Q uepa s a C orp. US D QP S A OTC B B 25.5 2.00 -9.1% 43.9% 25.0% 100. 0% 5. 3% -20.0%
O AO R B C Informa tion S ys tems US D R BCI R TS 193.9 1.40 -12.7% -12.7% 20.5% 55.3% 179.5% -17.8%
S ha nda Intera ctive E nterta inment L td. US D S NDA Nas da qG S 3,549.7 52.78 2. 3% -0.6% 9. 8% -0.7% 57.7% -18.8%
S hutterfly, Inc. US D S F LY Nas da qG S 463.7 18.06 -0.8% 20.4% 15.5% 33.8% 143.7% -4.0%
S K C ommunications C o., Ltd. KR W A066270 K OS E 561.6 15, 600.00 27.9% 106.9% 76.3% 58.4% 172.7% -4.3%
S NA P Intera ctive, Inc. US D S TVI OTC B B 4. 1 0.38 26.7% 90.0% 8. 6% -15. 6% -45.7% -64.8%
S ocialwis e, Inc. US D S C LW OTC B B 24.3 0.51 4. 1% 4.1% -16.4% -26. 1% -38.6% -50.0%
S ohu.com Inc. US D S O HU Nas da qG S 2,209.9 57.46 1. 4% 2.1% -11.1% -5.2% 16.9% -20.5%
S pa rk Networks , Inc. US D LO V A ME X 61.7 3.00 0. 0% 27.7% 34.5% 29.3% 17.6% -11.0%
S pectrumDNA, Inc. US D S P XA OTC B B 7. 6 0.16 3. 3% 10.7% 19.2% -46. 6% 3. 3% -65.6%
T encent H oldings Ltd. HK D 700 S E HK 39,524.0 168.50 4. 3% 14.9% 37.1% 89.9% 221.6% -0.3%
T he9 L imited US D NC T Y Nas da qG S 179.8 7.16 -1.5% -7.9% -5.6% -24. 4% -49.2% -57.0%
T heS treet.com, Inc. US D TS CM Nas da qG M 72.8 2.38 0. 8% 2.9% -18.8% 17.7% -30.7% -33.0%
T ree.C om, Inc. US D TR E E Nas da qG M 101.3 9.29 -0.4% 46.1% 19.1% -1.8% 145.1% -28.9%
U nis erve C ommunica tions C orp. C AD T S XV :U S S T S XV 1. 4 0.06 50.0% 50.0% 50.0% -25. 0% 50.0% -40.0%
U nited O nline Inc. US D UNT D Nas da qG S 618.6 7.31 0. 9% 5.1% -5.2% 14.3% 24.4% -22.7%
U OMO Media , Inc US D UO MO OTC B B 3. 7 0.04 -16.0% -30.0% -65.3% -68. 9% -58.0% -96.0%
V alueC lick Inc. US D V C LK Nas da qG S 869.9 10 2. 5% 5.6% -20.3% 1.9% 42.4% -27.2%
V OIS , Inc. US D V O IS OTC B B 11.9 0.01 0. 0% 0.0% 200.0% -16. 7% 200.0% -47.8%
W ebzen Inc. KR W K O S E :A069080 K OS E 114.1 11, 200.00 -5.9% 0.9% 6. 7% -30. 2% 153.1% -45.9%
W izzard S oftwa re C orporation US D W ZE A ME X 18.2 0.34 -8.1% -19.1% -26.1% -32. 0% -64.2% -64.2%
W orlds .com Inc. US D W DDD OTC B B 4. 8 0.09 0. 0% -10.0% 0. 0% -21. 7% -55.0% -60.9%
XING A G E UR O1B C XT R A 232.1 30.80 1. 8% -6.4% -13.2% 2.3% 13.2% -18.9%
Y D Online C orp. KR W A052770 K OS E 94.8 7, 350.00 6. 5% 20.1% -14.6% -18. 2% 16.1% -40.7%
Y nk K orea Inc. KR W A023770 K OS E 15.1 3, 290.00 -1.5% -11.0% -15.6% -52. 2% -25.3% -62.2%
H igh 60.0% 106.9% 200.0% 200. 0% 400.0% -0.1%
L ow -44.4% -50.0% -85.2% -94. 9% -98.4% -98.9%
Average 966.1 1.8% 3.8% 2.0% 8.5% 56.1% -37.2%
Media n 0. 2% -0.3% -5.2% -3.2% 28.6% -33.2%
United S tates 29 C hina 56,945.8 C hina 5, 694. 6 C hina 4,496.8 C hina 2,262.8 C hina 49. 0%
C hina 10 United S tates 5, 465.2 S weden 3, 266. 2 United S tates 3,752.1 United S ta tes 393.7 Aus tra lia 42. 8%
C a na da 9 J a pa n 4, 440.9 J apan 740. 1 S weden 1,942.0 S weden 274.4 T aiwan 37. 3%
S outh K orea 9 S weden 3, 266.2 T aiwan 515. 6 C a na da 992.4 J apa n 213.0 J apan 24. 3%
J a pa n 6 C a na da 2, 538.6 C ana da 282. 1 S outh K orea 740.1 C a na da 199.5 S outh K orea 20. 1%
T a iwa n 3 S outh K orea 1, 845.8 Hong K ong 237. 5 J a pa n 680.8 S outh K orea 133.5 S weden 14. 1%
G erma ny 3 T a iwa n 1, 546.9 S witzerland 205. 8 T a iwa n 404.6 T a iwan 65.0 Italy 13. 1%
Aus tra lia 2 G erma ny 318.0 S outh K orea 205. 1 Hong K ong 334.2 Italy 31.0 R us s ia 13. 1%
S witzerland 1 Hong K ong 237.5 R us s ia 193. 9 Ita ly 236.1 R us s ia 20.4 Hong K ong 6. 0%
India 1 S witzerland 205.8 United S ta tes 188. 5 G erma ny 171.4 Hong K ong 20.0 S witzerland 5. 4%
F inla nd 1 R us s ia 193.9 Italy 136. 8 R us s ia 156.3 G erma ny 9.7 G ermany -7. 4%
United K ingdom 1 Ita ly 136.8 G ermany 106. 0 Ma lays ia 78.5 Aus tra lia 4.9 C ana da -10. 6%
Ita ly 1 F inla nd 51.3 F inland 51. 3 S witzerla nd 63.0 S witzerland 3.4 United S ta tes -15. 4%
Hong K ong 1 Ma lays ia 36.4 Mala ys ia 36. 4 India 47.7 United K ingdom -2.7 F inland NA
S weden 1 Aus tra lia 29.4 India 20. 2 Aus tralia 17.8 F inla nd -18.5 India NA
R us s ia 1 India 20.2 Aus tra lia 14. 7 F inla nd 4.5 India -51.2 United K ingdom NA
Ma lays ia 1 United K ingdom 5.6 United K ingdom 5. 6 United K ingdom 0.0 Ma la ys ia -85.2 Mala ys ia NA
G rand Total 80 G rand Total 77,284.4 G rand Total 966.1 G rand Total 14,118.5 G rand Total 3,473.8 G rand Total 11.8%
G rand Total 80 G rand Total 77,284.4 G rand Total 966.1 G rand Total 14,118.5 G rand Total 3,473.8 G rand Total 11.8%
Fin. Amount (Million) Type of financing Fin. Amount (Million) Type of financ ing
C ompany Name Debt financing C ompany Name S eries A
One Net E ntertainment 10. 0 P laydom 43. 0
T he R ubicon P roject 8. 0 P opC ap G ames 22. 5
T ops y 3. 0 G OO M R adio 16. 0
Loomia 1. 5 Marin S oftware 13. 0
Myngle 1. 3 gW allet 12. 5
C ommunityLend 1. 3 S uperS ecret 10. 0
P ros per. com 1. 0 AdC hina 10. 0
T rans G aming Inc. 0. 5 Nurien 10. 0
Grand Total 26.5 G o Internet Media 10. 0
Intent Media 9. 0
InXpo 9. 0
G rand Total 165.0
Fin. Amount (Million) Type of financing Fin. Amount (Million) Type of financ ing
C ompany Name S eries B C ompany Name S eries C
G roupon 30. 0 Zynga 180. 0
S mith & T inker 29. 0 P andora Media 35. 0
S ynthas ite 20. 0 C haC ha 30. 0
K aixin001. com 20. 0 DailyMotion 25. 3
C ollective Media 20. 0 S ezmi 25. 0
As ter Data S ys tems 17. 0 T remor Media 20. 0
Livebookings 16. 0 E ngine Y ard 19. 0
Zynga 15. 0 L ithium 18. 0
Offerpal Media 15. 0 S ugar Inc. 16. 0
T umri 15. 0 Millennial Media 16. 0
Grand Total 197.0 HubS pot 16. 0
G rand Total 400.3
Fin. Amount (Million) Type of financing Fin. Amount (Million) Type of financ ing
C ompany Name S eries D C ompany Name S eries E
F acebook 200. 0 T witter 100. 0
T urbine 50. 0 E mergent G ame T echnologies 12. 5
R ockY ou 50. 0 G lam Media 10. 0
Y ouku 40. 0 News G ator 10. 0
T witter 35. 7 Mzinga 10. 0
Zoos k 30. 0 G rand Total 142.5
E ns equence 20. 0
Ning 15. 0
Zoove 13. 2
QuickP lay Media 12. 0
S endMe Inc. 12. 0
Grand Total 477.9
Grand Total 205.1 26.5 38.8 453.5 730.6 734.4 532.3 142.5 2863.7
1. None applicable.
ANALYST CERTIFICATION
Each analyst of Research Capital Corporation whose name appears in this report hereby certifies that (i) the
recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii)
no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or
recommendations expressed in this research report.
I n f o r ma t i o n a b o u t Re s e a r ch C a p i t a l C o r p o r a t i o n ’ s Ra t i n g S y s t e m, t h e d i s t r i b u t i o n o f o u r r e s e a r ch t o cl i e n t s a n d t h e p e r ce n t a g e o f r e c o m me n d a t i o n s wh i c h a r e i n e a c h
o f o u r r a t i n g c a t e g o r i e s i s a v a i l a b l e o n o u r we b si t e a t ww w. r e s e a r ch c a p i t a l . c o m.
T h e i n f o r ma t i o n c o n t a i n e d i n t h i s r e p o r t h a s b e e n d r a wn f r o m s o u r c e s b e l i e ve d t o b e r e l i a b l e b u t i t s a c cu r a c y o r co mp l e t e n e ss i s n o t g u a r a n t e e d , n o r i n p r o vi d i n g i t
d o e s R e s e a r c h Ca p i t a l C o r p o r a t i o n a s s u me a n y r e sp o n si b i l i t y o r l i a b i l i t y . R e s e a r ch C a p i t a l C o r p o r a t i o n , i t s d i r e ct o r s , o f f i c e r s a n d o t h e r e mp l o y e e s ma y , f r o m t i me t o
t i me , h a v e p o si t i o n s i n t h e s e cu r i t i e s me n t i o n e d h e r e i n . Co n t e n t s o f t h i s r e p o r t c a n n o t b e r e p r o d u c e d i n wh o l e o r i n p a r t wi t h o u t t h e e xp r e ss e d p e r mi s si o n o f R e se a r ch
C a p i t a l C o r p o r a t i o n . ( U . S . I n s t i t u t i o n a l Cl i e n t s — Re s e a r ch C a p i t a l U . S. A . I n c. ( a wh o l l y o wn e d s u b si d i a r y o f R e s e a r c h C a p i t a l Co r p o r a t i o n ) a cc e p t s r e s p o n si b i l i t y f o r
t h e c o n t e n t s o f t h i s r e p o r t s u b je c t t o t h e t e r ms & l i mi t a t i o n s s e t o u t a b o v e . F i r ms o r i n s t i t u t i o n s r e ce i vi n g t h i s r e p o r t s h o u l d e f f e ct t r a n s a ct i o n s i n s e c u r i t i e s d i sc u s se d
i n t h e r e p o r t t h r o u g h R e s e a r ch C a p i t a l U . S . A . I n c. , a B r o k e r - D e a l e r R e g i s t e r e d wi t h t h e U n i t e d S t a t e s S e cu r i t i e s a n d E xc h a n g e C o m mi s si o n ) .
Tor on to 4 16. 8 60. 76 00 M ontr eal 51 4. 39 9. 150 0 V anco u ver 60 4. 66 2. 180 0 C al gar y 40 3. 26 5. 740 0 R egi na 306. 566. 7550
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